Down 56% and 24% this year, are these 2 good deals for the FTSE 100?

So far 2024 has been a good year for the FTSE 100 Directory of leading companies. Indeed, the index hit a record high earlier this year.

But an index is just that, so individual companies within it can do better or worse than the performance of the index. So far this year, for example, several FTSE 100 stocks are down 56% and 24% respectively.

I bought both, because I think they are great deals. Here is my way of thinking.

Burberry shares fell by more than half

The first assignment in question is Burberry (LSE: BRBY).

From raincoats to fun glittery rags, Burberry has carved a unique niche in the global fashion scene. But this year, its raincoats were not enough to protect the company from the harsh weather.

That's partly down to a sharp drop in luxury spending around the world, thanks to a soft economy. Burberry faced additional company-specific challenges. For example, its position as a high-end product but not in the top league of the top players means that it has been squeezed out especially compared to higher priced or cheaper firms.

That has translated into shocking business performance recently.

Management changed, the dividend was canceled, and same-store sales in the latest quarter fell by more than a fifth compared to the same period last year. This FTSE 100 share hasn't broken for more than half of this year simply because of concerns about a downturn: it's a business in trouble that could be trouble.

So, why should I buy?

We know that luxury spending is often associated with overall economic health, which is circular. Sooner or later I expect that will improve.

Even in its difficult first half, Burberry maintained strong profits and good free cash flow. It has a unique product and proven business model. Over time I expect financial performance to improve. I think the drop in the stock price has gone too far.

An Asian-focused financial services company with a strong history

Burberry's problems are spread across markets, but a weak performance in Asia hasn't helped.

Asia is also the focus of the FTSE 100 financial services company Prudential (LSE: PRU) and weakness there didn't help shares, down 24% so far in 2024.

I've always liked the look of the company. Its focus on expanding its proven Asian business into emerging markets with huge untapped potential makes sense to me.

The brand is respected and Prudential has a large customer base in markets such as Hong Kong. The digitization drive can help improve profitability even for low-value customers in the long run.

In the first half, profits fell by more than 80%, although the company remained in the black. It has faced challenges ranging from macroeconomic uncertainty in China to persistent inflation in other Southeast Asian markets.

Falling stock prices reflect continued risks amid a mixed economic outlook. But Pru's proven business model, significant room for continued growth, and well-thought-out strategy mean I see its current value as a potential long-term one. That's why I invested.